I’m curious about these numbers that are shared during the analyst meetings etc. Is there any breakbown of the number or percentages,of existing clients moving to the cloud, and net new clients signing contracts? That would really provide a health check. Is SAP merely cannibalizing the client base, or is there a reasonable amount of net new clients coming in?
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Pretty much. Not net new. Prepare for another year of measly bonuses.
To add to the last response, SAP is also increasing the number of customers through acquisitions. But it’s not going as planned. A ”suite” of products under SAP costs way more than a single product used to cost before and acquisition or even a suite of products from before the acquisition. Getting these acquisition products to work with the rest of SAP takes years and customers don’t always want to wait that long. If customers can, they’ll look for cheaper and better alternatives. With AI, there are many startups competing with all SAP offerings besides ERP. And it’s only a matter of time before there’s a leaner and cheaper solution. SAP has pivoted their strategy by placing all bets on AI and that may not pan out. The Cloud Backlog forecast looks good for now but further growth is unlikely which is why analysts don’t rate SAP so high anymore and are changing guidance from “buy” to “hold”.
This is further exacerbated because of layoffs and reduced benefits which will cause employee turnover. And share buybacks reduce cash that SAP can use to invest in infrastructure and innovation. It’s a bad outlook for the company and employees and customers. The only winners here are the executives who will take a lot of money and leave with a very expensive VERP.
SAP is cannibalising current maintenance customers for RISE. SAP offered a one time ability to retire shelfware if you went to RISE. No new customers, in my opinion, would find RISE appealing because most large customers already have a significant footprint with the big hyperscalers, so why pay SAP for hosting? Again my opinion but any customer forced to RISE has occurred already, the rest have better plans. RISE was only focussed on existing customers moving their sw estate to cloud. CCB will continue its decline, same with support revenue. It had a shelf life and it’s over. Are any of the original RISE creators still at SAP? No! They knew it had an end date.